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Common Issues Encountered When Selling or Buying A Property

Property transactions can be complex and stressful. With so many details to take care of, there can be lots of potential for things to go wrong. This blog will look at the common issues that often cause problems in property transactions. We’ll also look at how these issues can be avoided and what to do if they do come up.

Common Issues with estate agents

If you are considering using an estate agent to sell your property, you will need to have a contract agreement in place between the estate agent and yourself. Please take time to read the contract carefully, to ensure you fully understand what you’re signing up to especially in relation to your potential liability if you have problems further down the line with your estate agent. Here are some common issues that might occur when using an estate agent to sell your property:

The Bill:

Sometimes the final bill from the estate agent may appear too high, make sure you check the final bill against the initial quotation. Sometimes there could be a misunderstanding in relation to VAT being added, this could increase the expected bill amount by 20% which could come as a shock to some.  

The cost:

The cost of things is always a question that we think about, right? One problem with commission relationships is the size of the bill. Most traditional high-street estate agents are commission-based, meaning they charge a percentage of the final sale price in fees. This commission can vary from as little as 1% to 3.5% and will increase or decrease with the price of the property.

You decide not to sell:

If you’ve decided you no longer want to sell your property, you may have a requirement to pay a charge covering any costs the estate agent has incurred to date. Read through the contract you signed with your estate agent to gain an understanding of the charges you may be liable for and compare this against your estate agent’s bill. The bill must provide a clear breakdown of the costs, including any commission fees, advertising costs and other charges such as VAT.

Inadequate communication:

One of the most important aspects in maintaining a good working relationship between an estate agent and yourselves is frequent communication from the outset. Traditionally Estate Agents act as an intermediary between all parties of a property transaction from the vendor to potential buyers, conveyancers, mortgage advisors and surveyors. So, it’s really important that your estate agents have good communication skills and you’re sure that they are passing on every message quickly and concisely. However, estate agents are notorious for having complaints against them in relation to their poor communication skills, with the main issue being not relaying messages on quickly enough.

Lack of responsibility for house viewings

When commissioning an estate agent to sell a property make sure you have agreed who will be undertaking the viewings, a common problem when a prospective buyer’s requests to view a property is the lack of availability of the estate agent to show prospective buyers around a property. Ultimately putting pressure on the vendor to undertake viewings in fear of missing out on potential buyers.

You want to use an additional estate agent:

When selling your home you will be asked to sign a contract with the estate agent who is going to list it for sale. The details of this contract will vary depending on the agent and situation, but there are some instances where other fees or commissions may apply when using an additional agent. It’s important that you know that there might be a future cost attached if this is something you intend to do. Also, some estate agents will not be willing to work with another estate agent. if you have already signed a contract with your estate agent, you may have signed a ‘sole agency’ agreement. This means that you agreed to sell exclusively through that agent for a fixed period of time (usually four months) and ensure you read the contract document carefully you could be forced to pay commission to both estate agents if you were to use other agents before the end of the said period.

You have found your own buyer:

You may have found your own buyer for the property, who has not been sourced through your estate agent, such as a family friend for example. You are entitled to sell to a buyer who has not been found by the estate agent. However, you may still have to pay the estate agent’s fees, the cost of which will depend on your contract.

Unsatisfactory service:

You might not be happy with the level of service you’re receiving from your estate agent. Maybe you feel that the advertising is not exactly to your liking or that they are being selective about who they are showing around your property, or maybe they just don’t make enough time in their schedule to give viewings. Whatever the problem may be, when it comes to selling a property through an estate agent, there is always someone at hand who will deal with any issues as it’s common practice for them to take care of things related to marketing and advertising. They also have a duty of care towards owners which obligates them to put sellers first meaning that if you are feeling as though you are not getting the adequate service needed, then there are actions you can take against them in order to get their attention. You might decide that the best thing for them is a formal letter demanding answers and stating your intentions towards any wrongful acts committed by the agency.

If you experience any of these problems with your estate agent, you should make a complaint via their complaints procedure which should be clearly identified on their website. Once you’ve complained, If you’re unhappy with their response, you can complain to their independent complaints body. All estate agents dealing with residential property must belong to a government-approved complaints redress scheme. The approved schemes are The Property Ombudsman or The Property Redress Scheme. These will review your complaint and have a formal redress scheme in place, any estate agent who does not belong to one of these redress schemes can be fined.

Common problems with surveyors and valuers

If you are selling your property generally the property buyer will instruct a survey to be undertaken. Once a survey has been undertaken this survey could identify issues with the property that the potential buyer was unaware of. Depending on the severity of the issues the potential buyer may request a reduction in the price to rectify the issue or may request the seller to repair the issue prior to the buyer completing the sale. This will usually delay the sale process causing an impact on both cost and time for the seller.

Another issue for the seller to consider is the surveyor’s valuation of the property, for example, if a potential buyer only has a small deposit when purchasing your property say 10% as an example which is the minimum most mortgage lenders require. If a property valuation is lower than the sale price agreed the mortgage lender will only lend against the valuation price, not the sale price. This could put a potential sale in jeopardy if the buyer does not have the additional funds available to make up the difference. 

Worked example below:

Item

Amount

Agreed Sale Price

 £200,000.00

Scenario 1 – Valuation same as the sale price

Property Valuation

 £200,000.00

90% Mortgage

 £180,000.00

Deposit required

 £20,000.00

Scenario 2 – Valuation lower than a sale price

Property Valuation

 £190,000.00

90% Mortgage

 £171,000.00

Deposit required

 £29,000.00

If you purchase a property, more than likely you will get a property survey undertaken on that property. There are three main types of surveys you may instruct a surveyor to undertake a Condition survey, Homebuyers and a structural survey, with the structural survey being the most comprehensive survey available. This survey includes a detailed analysis of the building’s structural integrity and condition, the survey also provides detailed analysis of and repairs needed within the property.

Once you have moved into the property, you may find additional defects to the property that was not identified within the structural survey report. In some instances, depending on the severity of the defect you may be entitled to compensation, it’s always worth looking through your surveyor’s complaints procedure, as all RICS surveyors must have a complaints procedure in place which also gives details of their alternative dispute resolution procedure (ADR) such as The Property Ombudsman (TPO) who can order the surveyor to pay compensation in certain circumstances.

Common problems selling through Mortgage Lenders and Building Societies

If you are buying a property with the help of a mortgage lender, you may experience difficulty obtaining a mortgage. This is because mortgage providers have lots of rules and checks they undertake when assessing your eligibility for their mortgage product. One of the main areas where people tend to get rejected for mortgage products is their affordability checks. This check reviews all your ingoing and outgoing payments and assesses your affordability to make mortgage repayments if your income reduces or if interest rates increase.

Another common issue when purchasing property with a mortgage is the length of time the process is extended due to the due diligence required by the mortgage lenders. Until the mortgage offer is made, contracts exchanged cannot be completed which can cause a significant delay in completing the sale.

Common problems with buyers

One of the main concerns for sellers should be the fact that a potential buyer can legally withdraw their offer at any time prior to the exchange of contracts. This is because within England and Wales before contracts are exchanged, the buyer has no legal obligation to purchase your home and does not have any obligation to pay any of the costs you may have incurred up to this point. In Scotland, the buyer may withdraw their offer before the conclusion of missives. Once the missives have been concluded, neither party can withdraw from the transaction.

Another important point we want to make here is that your buyer can reduce the price of your property before exchanging contracts which is called Gazundering and although it’s still considered legal, it generally isn’t advised in practice to back out or reduce an offer.

Common problems with the seller

When it comes to purchasing a property, one of the biggest problems buyers face is “Gazumping.” This is where the seller accepts your offer and prior to exchanging contracts, the seller accepts another offer from a different seller. The seller can also withdraw their property from the market at any time prior to the exchange of contracts without incurring any charges.

A seller does also have the ability to accept multiple offers and instruct their solicitor to send contracts to multiple parties and exchange contracts with the party who can complete the conveyancing work the quickest. Thus, introducing a race, the buyer does however have the option to withdraw their offer if they do not want to incur abortive legal costs.

Broken House Chain

A House Chain is where a series of house transactions are linked and reliant on the preceding and succeeding purchases in order to complete the transaction. A problem can occur if one party in the housing chain pulls out of the transaction for any reason. Causing the House chain to break. A buyer may withdraw from a sale process for different reasons. However, the most common reasons are problems related to finance and a sudden change of mind or the discovery of another property.

The decision of buyers is also influenced by issues related to the current property. For instance, when a buyer finds out they need to make major renovations or repairs, they might be discouraged. The same applies to issues related to surveys, documentation, and paperwork. If your buyer is relying on a property chain, they may pull out of the sales process if they lose their house sale due to their own buyers pulling out. In England and Wales, as mentioned earlier a buyer may withdraw their offer on a property without any consequences prior to the exchange of contracts. A buyer is only legally obliged to purchase the home after a successful exchange of contracts. If they withdraw before the exchange, they do not have to pay any costs. This is slightly different in Scotland where a buyer will have no penalty from pulling out of a house sale prior to the missives being concluded, once the missives have been concluded if the buyer pulls out, they will generally have to pay damages to the seller as per there agreement (missives). For more information on house chains please click here.

My house won’t sell – what are my options?

If you are struggling to sell your property don’t worry this is a common problem for property sellers and the solution could be relatively straightforward. Generally, it comes down to a couple of factors such as the property asking price, how the property is being marketed and the properties condition.

Is the property priced correctly?

If you are struggling to get viewings through the door one of the reasons could be that you’ve set an over ambitious asking price for the property. Once a property goes on the market, give it a few weeks, if you’ve not had many viewings then consider lowering the price to attract more interest in the property. Try doing some homework on recent property sales in your local area, this will give you a good indication of how much your property is currently worth based on the current property for sale and recent sold prices. To get a good indication of the current market value of your property take a look at Zoopla on the following link: https://www.zoopla.co.uk/home-values/

One important factor to consider when thinking about lowering a property price, is what the current property market condition is, for example, if the property is slow, you could be waiting for months to get a viewing through the door. If your property has been listed for sale for a long period of time, consider taking it off the market for a short period so people are not put off by how long the property has been listed for sale.

How the property is being marketed:

One of the biggest mistakes people often make when selling a property is bad photographs, when potential buyers are looking for property nowadays, they view properties online prior to arranging a viewing. First impressions are the most lasting so good photographs can make all the difference. Most estate agents offer professional photographs for a small additional fee, this will be well worth the additional fee for the additional interest this is likely to attract. Tips for the photographs, ensure that the house is clean and tidy and the garden has been de-weeded and the grass has been cut.

When showing people around the property, some easy mistakes to make is if the property smells, nothing is more off-putting to a buyer than a smelly house, ensure the house has been de-cluttered and cleaned. Also, a good tip is to turn all the lights on to make the property appear light and bright.

Property Condition

Sometimes you will not notice a properties poor condition from the photographs online, if you’re getting lots of viewing through the door but no offers potentially this could be related to the condition of the property.

One of the easiest big wins to improve the properties condition is decorating, decorating must be the first thing that comes to mind when people think about adding value to a home, giving your house a fresh coat of paint and undertaking some general maintenance repairs, which can be completed at a relatively low cost compared to the potential impact. Although these small jobs will not directly affect the property value, they will certainly have a big impact on its kerb appeal and make the properties condition appear much better.

A Home in good condition is likely to generate more interest, here is a list of simple repairs that you should consider rectifying:

  • Ripped wallpaper
  • Peeling / tired paint
  • Cleaning and general tidying
  • Broken light bulbs or light fittings
  • Squeaking doors, floors and stairs
  • Update flooring finishes with new carpets, laminate, vinyl or timber flooring
  • Remove bad smells or odours
  • Replace tired curtains and blinds

If you are struggling to sell your property and would like to secure a fast house sale, Sell My Home Now could offer you up to 85% of the market value, completing the transaction in a matter of days of a timescale of your choice.

If you’d like to sell your property quickly, contact our friendly team today for a free no-obligation cash offer.

If you would like to sign up to our newsletter please enter your email below

Common Issues Encountered When Selling or Buying A Property

Property transactions can be complex and stressful. With so many details to take care of, there can be lots of potential for things to go wrong. This blog will look at the common issues that often cause problems in property transactions. We’ll also look at how these issues can be avoided and what to do if they do come up.

Common Issues with estate agents

If you are considering using an estate agent to sell your property, you will need to have a contract agreement in place between the estate agent and yourself. Please take time to read the contract carefully, to ensure you fully understand what you’re signing up to especially in relation to your potential liability if you have problems further down the line with your estate agent. Here are some common issues that might occur when using an estate agent to sell your property:

The Bill:

Sometimes the final bill from the estate agent may appear too high, make sure you check the final bill against the initial quotation. Sometimes there could be a misunderstanding in relation to VAT being added, this could increase the expected bill amount by 20% which could come as a shock to some.  

The cost:

The cost of things is always a question that we think about, right? One problem with commission relationships is the size of the bill. Most traditional high-street estate agents are commission-based, meaning they charge a percentage of the final sale price in fees. This commission can vary from as little as 1% to 3.5% and will increase or decrease with the price of the property.

You decide not to sell:

If you’ve decided you no longer want to sell your property, you may have a requirement to pay a charge covering any costs the estate agent has incurred to date. Read through the contract you signed with your estate agent to gain an understanding of the charges you may be liable for and compare this against your estate agent’s bill. The bill must provide a clear breakdown of the costs, including any commission fees, advertising costs and other charges such as VAT.

Inadequate communication:

One of the most important aspects in maintaining a good working relationship between an estate agent and yourselves is frequent communication from the outset. Traditionally Estate Agents act as an intermediary between all parties of a property transaction from the vendor to potential buyers, conveyancers, mortgage advisors and surveyors. So, it’s really important that your estate agents have good communication skills and you’re sure that they are passing on every message quickly and concisely. However, estate agents are notorious for having complaints against them in relation to their poor communication skills, with the main issue being not relaying messages on quickly enough.

Lack of responsibility for house viewings

When commissioning an estate agent to sell a property make sure you have agreed who will be undertaking the viewings, a common problem when a prospective buyer’s requests to view a property is the lack of availability of the estate agent to show prospective buyers around a property. Ultimately putting pressure on the vendor to undertake viewings in fear of missing out on potential buyers.

You want to use an additional estate agent:

When selling your home you will be asked to sign a contract with the estate agent who is going to list it for sale. The details of this contract will vary depending on the agent and situation, but there are some instances where other fees or commissions may apply when using an additional agent. It’s important that you know that there might be a future cost attached if this is something you intend to do. 

Also, some estate agents will not be willing to work with another estate agent. if you have already signed a contract with your estate agent, you may have signed a ‘sole agency’ agreement. This means that you agreed to sell exclusively through that agent for a fixed period of time (usually four months) and ensure you read the contract document carefully you could be forced to pay commission to both estate agents if you were to use other agents before the end of the said period.

You have found your own buyer:

You may have found your own buyer for the property, who has not been sourced through your estate agent, such as a family friend for example. You are entitled to sell to a buyer who has not been found by the estate agent. However, you may still have to pay the estate agent’s fees, the cost of which will depend on your contract.

Unsatisfactory service:

You might not be happy with the level of service you’re receiving from your estate agent. Maybe you feel that the advertising is not exactly to your liking or that they are being selective about who they are showing around your property, or maybe they just don’t make enough time in their schedule to give viewings. Whatever the problem may be, when it comes to selling a property through an estate agent, there is always someone at hand who will deal with any issues as it’s common practice for them to take care of things related to marketing and advertising. 

They also have a duty of care towards owners which obligates them to put sellers first meaning that if you are feeling as though you are not getting the adequate service needed, then there are actions you can take against them in order to get their attention. You might decide that the best thing for them is a formal letter demanding answers and stating your intentions towards any wrongful acts committed by the agency.

If you experience any of these problems with your estate agent, you should make a complaint via their complaints procedure which should be clearly identified on their website. Once you’ve complained, If you’re unhappy with their response, you can complain to their independent complaints body. All estate agents dealing with residential property must belong to a government approved complaints redress scheme. The approved schemes are The Property Ombudsman or The Property Redress Scheme. These will review your complaint and have a formal redress scheme in place, any estate agent who does not belong to one of these redress schemes can be fined.

Common problems with surveyors and valuers

If you are selling your property generally the property buyer will instruct a survey to be undertaken. Once a survey has been undertaken this survey could identify issues with the property that the potential buyer was unaware of. Depending on the severity of the issues the potential buyer may request a reduction in the price to rectify the issue or may request the seller to repair the issue prior to the buyer completing the sale. This will usually delay the sale process causing an impact on both cost and time for the seller.

Another issue for the seller to consider is the surveyor’s valuation of the property, for example, if a potential buyer only has a small deposit when purchasing your property say 10% as an example which is the minimum most mortgage lenders require. If a property valuation is lower than the sale price agreed the mortgage lender will only lend against the valuation price, not the sale price. This could put a potential sale in jeopardy if the buyer does not have the additional funds available to make up the difference. 

Worked example below:

Item

Amount

Agreed Sale Price

 £200,000.00

Scenario 1 – Valuation same as the sale price

Property Valuation

 £200,000.00

90% Mortgage

 £180,000.00

Deposit required

 £20,000.00

Scenario 2 – Valuation lower than a sale price

Property Valuation

 £190,000.00

90% Mortgage

 £171,000.00

Deposit required

 £29,000.00

If you purchase a property, more than likely you will get a property survey undertaken on that property. There are three main types of surveys you may instruct a surveyor to undertake a Condition survey, Homebuyers and a structural survey, with the structural survey being the most comprehensive survey available. This survey includes a detailed analysis of the building’s structural integrity and condition, the survey also provides detailed analysis of and repairs needed within the property.

Once you have moved into the property, you may find additional defects to the property that was not identified within the structural survey report. In some instances, depending on the severity of the defect you may be entitled to compensation, it’s always worth looking through your surveyor’s complaints procedure, as all RICS surveyors must have a complaints procedure in place which also gives details of their alternative dispute resolution procedure (ADR) such as The Property Ombudsman (TPO) who can order the surveyor to pay compensation in certain circumstances.

Common problems selling through Mortgage Lenders and Building Societies

If you are buying a property with the help of a mortgage lender, you may experience difficulty obtaining a mortgage. This is because mortgage providers have lots of rules and checks they undertake when assessing your eligibility for their mortgage product. One of the main areas where people tend to get rejected for mortgage products is their affordability checks. This check reviews all your ingoing and outgoing payments and assesses your affordability to make mortgage repayments if your income reduces or if interest rates increase.

Another common issue when purchasing property with a mortgage is the length of time the process is extended due to the due diligence required by the mortgage lenders. Until the mortgage offer is made, contracts exchanged cannot be completed which can cause a significant delay in completing the sale.

Common problems with buyers

One of the main concerns for sellers should be the fact that a potential buyer can legally withdraw their offer at any time prior to the exchange of contracts. This is because within England and Wales before contracts are exchanged, the buyer has no legal obligation to purchase your home and does not have any obligation to pay any of the costs you may have incurred up to this point. In Scotland, the buyer may withdraw their offer before the conclusion of missives. Once the missives have been concluded, neither party can withdraw from the transaction.

Another important point we want to make here is that your buyer can reduce the price of your property before exchanging contracts which is called Gazundering and although it’s still considered legal, it generally isn’t advised in practice to back out or reduce an offer.

Common problems with the seller

When it comes to purchasing a property, one of the biggest problems buyers face is “Gazumping.” This is where the seller accepts your offer and prior to exchanging contracts, the seller accepts another offer from a different seller. The seller can also withdraw their property from the market at any time prior to the exchange of contracts without incurring any charges.

A seller does also have the ability to accept multiple offers and instruct their solicitor to send contracts to multiple parties and exchange contracts with the party who can complete the conveyancing work the quickest. Thus, introducing a race, the buyer does however have the option to withdraw their offer if they do not want to incur abortive legal costs.

Broken House Chain

A House Chain is where a series of house transactions are linked and reliant on the preceding and succeeding purchases in order to complete the transaction. A problem can occur if one party in the housing chain pulls out of the transaction for any reason. Causing the House chain to break. A buyer may withdraw from a sale process for different reasons. However, the most common reasons are problems related to finance and a sudden change of mind or the discovery of another property.

The decision of buyers is also influenced by issues related to the current property. For instance, when a buyer finds out they need to make major renovations or repairs, they might be discouraged. The same applies to issues related to surveys, documentation, and paperwork. If your buyer is relying on a property chain, they may pull out of the sales process if they lose their house sale due to their own buyers pulling out. 

In England and Wales, as mentioned earlier a buyer may withdraw their offer on a property without any consequences prior to the exchange of contracts. A buyer is only legally obliged to purchase the home after a successful exchange of contracts. If they withdraw before the exchange, they do not have to pay any costs. This is slightly different in Scotland where a buyer will have no penalty from pulling out of a house sale prior to the missives being concluded, once the missives have been concluded if the buyer pulls out, they will generally have to pay damages to the seller as per there agreement (missives). For more information on house chains please click here.

My house won’t sell – what are my options?

If you are struggling to sell your property don’t worry this is a common problem for property sellers and the solution could be relatively straightforward. Generally, it comes down to a couple of factors such as the property asking price, how the property is being marketed and the properties condition.

Is the property priced correctly?

If you are struggling to get viewings through the door one of the reasons could be that you’ve set an over ambitious asking price for the property. Once a property goes on the market, give it a few weeks, if you’ve not had many viewings then consider lowering the price to attract more interest in the property. Try doing some homework on recent property sales in your local area, this will give you a good indication of how much your property is currently worth based on the current property for sale and recent sold prices. To get a good indication of the current market value of your property take a look at Zoopla on the following link: https://www.zoopla.co.uk/home-values/

One important factor to consider when thinking about lowering a property price, is what the current property market condition is, for example, if the property is slow, you could be waiting for months to get a viewing through the door. If your property has been listed for sale for a long period of time, consider taking it off the market for a short period so people are not put off by how long the property has been listed for sale.

How the property is being marketed:

One of the biggest mistakes people often make when selling a property is bad photographs, when potential buyers are looking for property nowadays, they view properties online prior to arranging a viewing. First impressions are the most lasting so good photographs can make all the difference. Most estate agents offer professional photographs for a small additional fee, this will be well worth the additional fee for the additional interest this is likely to attract. Tips for the photographs, ensure that the house is clean and tidy and the garden has been de-weeded and the grass has been cut.

When showing people around the property, some easy mistakes to make is if the property smells, nothing is more off-putting to a buyer than a smelly house, ensure the house has been de-cluttered and cleaned. Also, a good tip is to turn all the lights on to make the property appear light and bright.

Property Condition

Sometimes you will not notice a properties poor condition from the photographs online, if you’re getting lots of viewing through the door but no offers potentially this could be related to the condition of the property.

One of the easiest big wins to improve the properties condition is decorating, decorating must be the first thing that comes to mind when people think about adding value to a home, giving your house a fresh coat of paint and undertaking some general maintenance repairs, which can be completed at a relatively low cost compared to the potential impact. Although these small jobs will not directly affect the property value, they will certainly have a big impact on its kerb appeal and make the properties condition appear much better.

A Home in good condition is likely to generate more interest, here is a list of simple repairs that you should consider rectifying:

  • Ripped wallpaper
  • Peeling / tired paint
  • Cleaning and general tidying
  • Broken light bulbs or light fittings
  • Squeaking doors, floors and stairs
  • Update flooring finishes with new carpets, laminate, vinyl or timber flooring
  • Remove bad smells or odours
  • Replace tired curtains and blinds

If you are struggling to sell your property and would like to secure a fast house sale, Sell My Home Now could offer you up to 85% of the market value, completing the transaction in a matter of days of a timescale of your choice.

If you’d like to sell your property quickly, contact our friendly team today for a free no-obligation cash offer.

If you would like to sign up to our newsletter please enter your email below

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